Sustainability, indeterminacy and oscillations in a growth model with environmental assets

摘要

We consider an economy where welfare of a continuum of (identical) agents depends on three goods: leisure, a free access renewable environmental asset and a produced good which can be consumed or saved to accumulate physical capital. We assume that aggregate consumption depletes the natural resource and that economic agents take as exogenously given the negative impact on the environmental asset by aggregate consumption. In this context, we show that indeterminacy and oscillating behavior may arise. (C) 2003 Elsevier Ltd. All rights reserved.